Commercial market's slide to be even longer than residential, experts say
August 05, 2009 11:00AM By Alison Gregor
From the August issue: Manhattan's residential real estate market might be feeling serious
pain, but many real estate insiders believe the city's commercial
market will spend a much longer period in the doldrums.
While residential real estate is suffering from an oversupply of
inventory and a bursting price bubble largely spurred by a drop in
lending standards, commercial real estate is confronting obstacles on
the debt side that appear to be more entrenched. What's more, experts
say the problems on the commercial side are in many ways just getting
started and will require far longer to sort themselves out.
For one, Manhattan's office vacancy rate last month was 13.1
percent, and the commercial brokerage Colliers ABR is predicting it may
hit a high of 18 percent, significantly higher than the last downturn,
said Richard Bernstein, a vice chairman at the firm.
Lawrence Longua, a clinical associate professor with New York
University's Real Estate Institute, said history has shown that the
commercial market typically takes longer to recover than the
residential sector in a recession.
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Comments
Anonymous
Commercial is doomed. Those corporate wannabees are going to have to schlep like the rest of us. Get geared up commercial brokers, no more cushy commissions. Be prepared to call back those clients who are looking for 3,000sf.
Comment #1 Posted By: Anonymous 08/05/09
Anonymous
With transportation becoming more expensive and communication becoming cheaper, less people are going to be needed for large offices. Need to be more innovative on how to use the space.
Comment #2 Posted By: Anonymous 08/05/09
Anonymous
Prices need to come down.
Comment #3 Posted By: Anonymous 08/05/09
Anonymous
Commercial bottom = 2017/2018
Comment #4 Posted By: Anonymous 08/05/09
Anonymous
We all know the economy is not picking up anytime soon but 2017-2018 is pushing it...
Comment #5 Posted By: Anonymous 08/05/09
Anonymous
Commercial real estate market recovery to come in 2017, Parkus of Deutsche Bank says June 22, 2009 03:30PM The country's commercial real estate market is unlikely to recover until 2017, Richard Parkus, the head analyst of commercial mortgages for Deutsche Bank Securities, said today. Until then, commercial real estate values could fall by more than 50 percent from their 2007 peak, Parkus said. In New York, rents are already down about 50 percent if free rent and other incentives are factored in. Business Week reported that the residential real estate market will likely rebound in 2012.
Comment #6 Posted By: Anonymous 08/05/09